"As regards the issue of Jammu and and
Kashmir, we believe this is an issue we all need to address, and progress on
other issues will be made in tandem with the progress on the issue of Jammu and
Kashmir," Aziz told reporters after talks with his Indian counterpart Manmohan
Singh.

New Delhi says further improvements in ties between the nuclear-armed
neighbours should not be held hostage to their dispute over Kashmir. Pakistan
fears India, which controls the lion's share of Kashmir, is dragging its feet
over the dispute.

The talks came after renewed discord over Kashmir between the neighbours who
have twice gone to war over the scenic Himalayan region.

Aziz said peace talks would continue on a range of issues and said he was
optimistic the two countries, who have fought three wars in the last five
decades, could achieve sustainable peace.

"We had a good day of meetings, and discussions on a wide range of issues.
The talks were held in a conducive, friendly atmosphere," said the Pakistani
leader, making a rare visit across the border.

But Aziz said the two sides had not yet resolved a row over what travel
documents Kashmiris would use to travel on a proposed bus service linking the
capitals of the two parts of Kashmir under Indian and Pakistani control.

"In the meeting we talked about the need for having a bus service, but we
have to sort out the details of what travel documents will be required," Aziz
said.

India, which considers Kashmir an integral part of its territory, wants
people travelling from its part of the divided region to carry Indian passports.
Pakistan says the region is disputed and has proposed travel with U.N.
documents.

Kashmiris have been urging both sides to resolve their differences and start
the bus services that would to help reunite divided families. The region has
been at the root of the enmity between India and Pakistan since both were carved
out of British colonial India in 1947.

The visit comes after diplomatic sparks flew last week when Singh ruled out
any redrawing of India's borders or a further division of Kashmir, spiking a set
of proposals by Pakistani President Pervez Musharraf.

Musharraf suggested last month that Kashmir should be demilitarised and
India and Pakistan should agree on a compromise over its disputed status. That
outcome could be joint control, some form of U.N. control or independence.

Despite the row, India has started to withdraw some troops from Kashmir,
citing a decline in guerrilla violence.

On Wednesday, separatist militants threw a grenade at a paramilitary
picked in Indian Kashmir wounding six civilians.

NO PROGRESS ON PIPELINE

Aziz met Indian oil minister Mani Shankar Aiyar to discuss a longstanding
plan to build a gas pipeline to run through Pakistan and bring fuel to
energy-hungry India from Iran. No discernible progress was achieved.

Aziz said Pakistan would go ahead with plans to bring gas from Iran,
Turkmenistan or Qatar -- with or without India's participation.

"We have asked the Indian government to join us in this project. However if
they have other sources of energy, Pakistan is going ahead with this pipeline
anyway for its own use."

Oil analysts say a major pipeline would not be viable unless it tapped the
lucrative Indian market. India says any movement on the pipeline could only be
made after overall economic ties improve between the uneasy neighbours.

"It shouldn't be that in one field we race ahead and not in others," Aiyar
told reporters. New Delhi has urged Pakistan to expand trade links, including
granting Most Favoured Nation status to India.